General Mills' earnings unhurt by boycott over marriage issue

About 50 protesters marched in front of General Mills headquarters in Golden Valley in June. Protesters said the company should "stay out of the marriage business" and remain neutral politically. (Pioneer Press file photo: John Doman)

Three months ago, General Mills cheered supporters of gay marriage by taking a public stand opposing the marriage amendment on the Minnesota ballot this November.

In response, supporters of traditional marriage organized protests, petition drives and a boycott of General Mills products.

What has happened to General Mills' financials since? Investors got a closer look on Wednesday, Sept. 19, when the Golden Valley-based foodmaker released its first-quarter results. They showed:

-- Shares of General Mills are up 5 percent since mid-June, when CEO Ken Powell first announced the company's opposition to Minnesota's proposed marriage amendment. The amendment, if passed, would add to the state constitution the existing state law that defines marriage only as the union of one man and one woman.

Since the controversy first arose, General Mills' stock has outperformed food-industry rivals Kellogg, Danone and ConAgra, though not Kraft. But the S&P 500 has outperformed them all, as the broader market has surged past the stocks of consumer food companies.

Powell didn't address the same-sex marriage issue during Wednesday's earnings call, but earlier, he told the Pioneer Press he hadn't seen any sales impact from the boycott.

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Back on June 13, Powell first told a gay employees group that General Mills would publicly oppose the marriage amendment. Few of Minnesota's major corporations have been so outspoken on the topic and many wondered about a backlash.

"We do not believe the proposed constitutional amendment is in the best interests of our employees or our state economy -- and as a Minnesota-based company we oppose it," the foodmaker announced in June.

A backlash came quickly. The National Organization for Marriage said General Mills had "declared a war on marriage," then organized protests and a consumer boycott.

"This will go down as one of the dumbest corporate PR stunts of all time," Brian Brown, president of the group, said at the time.

To date, nearly 25,000 consumers have pledged to boycott General Mills products at the website DumpGeneralMills.com.

"You hear a lot of bluster from groups like the National Organization for Marriage," said Michael Cole-Schwartz of the Human Rights Campaign, a national gay rights group. "But at the end of the day, the majority of Americans are supportive of marriage equality, and no companies have ever paid the price that groups like NOM threaten to exact on them."

But to the National Organization for Marriage, the boycott did capture public attention, it united its members, and it certainly got the attention of General Mills.

"We've had about 25,000 people who have told General Mills that they don't appreciate the corporate stance on gay marriage," said Jonathan Baker, director of NOM's Corporate Fairness Project. He concedes it's hard to tease out specific financial consequences, "given how broad they are as a multinational corporation."

But, Baker added, "When a company is struggling, as General Mills is in the yogurt business -- and I also saw their cereal sales were down -- it's not a good time to alienate half of your customer base."

The first-quarter results show General Mills is indeed struggling in the yogurt business, but its struggles to fend off Greek-style yogurt rivals predate any controversy over gay marriage. Then again, General Mills scored first-quarter gains in its snack bar business, but that didn't seem to have much to do with gay marriage, either.

Akshay Rao, a marketing professor at the Carlson School of Management at the University of Minnesota, is skeptical about making links between sales figures and political protests.

"To make a connection between an earnings report and a particular social phenomenon is very difficult. ... What you can infer, based on how quiet everything has been since the initial flurry of protests and counterprotests, is that the issue pretty much lost steam. And I think there's been a good reason for that."

Rao notes that General Mills has scores of brands, from Progresso Soup to Nature Valley snack bars to Hamburger Helper.

"The people engaging in the boycott have to make a shopping list of things not to buy," he said. "And that's difficult to do."